CUSTOMS CONCLUDES ERP, SHIFTS GEARS TO ACE DEVELOPMENT
After two years of intense negotiations with the industry on how to reform the country’s import entry process, U.S. Customs believes it’s time to take what has been agreed upon and begin to build its future computer system, the Automated Commercial Environment.
In December 1999, Customs proposed the Entry Revision Project to the industry. Since then the industry built up a coalition of 17 large trade associations and developed a “white paper,” which outlined its demands for import entry reform.
“Since we appear to be in general agreement on the concepts, and the ACE Prime contract has recently been awarded, we will terminate the ERP initiative and focus our developmental efforts on the ACE process,” said Stuart P. Seidel, assistant commissioner for Customs’ Office of Regulations and Rulings, in a letter to the coalition.
In general, Customs agreed with the industry’s proposal on filing “minimal data at release” for all importers on formal entries, but that “essential data to accomplish this function will be required.” Essential data includes whether six to 10 digit tariff numbers are required at the time of release and whether quantity and total value are needed.
Customs and the industry agreed that it’s reasonable to require the entry filer to indicate which of the entry summary processing options is being used. The agency also agreed to the principals of the Importer Activity Summary Statement, which would be filed 20 days after the end of the month in ACE. IASS-based post release and revisions still need to be worked out in the new system.
The Census Bureau also agrees with the industry’s view of IASS as envisioned in the 1993 Customs Modernization Act. “We fully support the goal of reducing both the frequency and volume of transmissions by providing an option for aggregate import entry summary filing while maintaining the current filing options,” said C. Harvey Monk Jr., chief of Census’ Foreign Trade Division.
Certain industry coalition members, however, have raised concern about the agency’s statement regarding post release and revisions in IASS that “Customs reserves the right to liquidation on all company entries when a general audit of the company is conducted.” These coalition members said they will “intensely question the agency’s intention of this ‘carte blanche’ approach to extending liquidation across the board on all of an importer’s entries for an open period of time.”
On the industry’s call for a 21-month reconciliation period, Customs raised some concerns. The agency said it had previously agreed to an 18-month modification period. “We are concerned that more justification needs to be presented as to why this is necessary and that, based on our experience in the reconciliation prototype, many companies are simply taking the extra time and doing little, if any, additional entry review,” Seidel said.
The agency called the industry’s proposed payment method to settle duties taxes and fees “an innovative approach that certainly merits further consideration.”
Other areas of the industry’s white paper which Customs said need further work are the “tail-end” entry activities, such as liquidation, protests, and clerical errors. “One of the ideas that had been discussed in the ERP process was substituting a 180-day protest period for elimination of the one year ‘clerical error, inadvertence, mistake of fact provision,'” Seidel said.
Duty drawback issues also need to be addressed. “We will continue to work with the trade representatives on this subject, but we stress our firm belief that a comprehensive review of the core drawback requirements is essential,” Seidel said.
Customs praised the industry for its overall work on the ERP initiative, but it said the long-standing entry-by-entry process still prevails in the industry’s white paper.
“We remain convinced that as entry volumes grow (currently 23.5 million per year) the day will come when many large companies will prefer to work on a ‘fiscal year’ rather than entry by entry approach,” Seidel said. “While the consensus reached by the trade is not as visionary as we had proposed in the ‘Extended Option’ track of the various ERP proposals, in the spirit of partnership, we recognize the trade must ultimately agree as to how much change should be undertaken at any one time.”
The trade coalition said its work on import entry reform is far from over, and plans to continue to pursue broader Customs’ reform to the import entry process by lobbying for legislative changes on Capitol Hill.